FX.co ★ Soft Start Called For Malaysia Stock Market

Before the Labor Day holiday on Wednesday, the Malaysian stock market broke a two-day streak of gains and is now barely above the 1,575-point mark. There's potential for further drops on Thursday.

Global predictions suggest that the Asian markets may be weaker due to the Federal Reserve's rate decision and statement. European markets were in the red, and the US markets showed mixed results. This could lead to a divide in the Asian market response.

On Tuesday, the Kuala Lumpur Composite Index (KLCI) saw a small decrease. Losses from the finance and plantation sectors were slightly offset by support from the telecommunications industry. The index dropped 6.69 points, or 0.42 percent, ending at its daily low of 1,575.97.

In active stocks, Axiata went up by 1.07 percent, whereas Celcomdigi fell by 0.72 percent. Genting saw a 0.44 percent drop, and Genting Malaysia increased by 0.38 percent. Meanwhile, IHH Healthcare was down 0.63 percent, IOI Corporation and Petronas Dagangan both decreased 0.73 percent, and Kuala Lumpur Kepong was down slightly by 0.26 percent.

The Wall Street guidance doesn't provide much direction, as major averages remained largely unchanged on Wednesday, despite a brief increase following the Federal Reserve's monetary policy announcement.

The Dow gained 87.37 points or 0.23 percent, finishing at 37,903.29, while the NASDAQ dropped 52.34 points or 0.33 percent, ending at 15,605.48. The S&P 500 dropped 17.30 points or 0.34 percent, closing at 5,018.39.

The Federal Reserve decided to maintain current interest rates, citing a lack of substantial progress towards its 2 percent inflation goal. Fed officials stated that they need more assurance that inflation is steadily moving towards this 2 percent mark before making any rate cuts.

In economic news, a report from payroll processor ADP showed an increase in private sector employment in April, exceeding expectations. Oil prices dropped significantly to a seven-week low after last week's data indicated a surprising increase in US crude inventories. The West Texas Intermediate Crude futures for June closed at $79 a barrel, the lowest since March 12.